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by Paul Waine » Fri Nov 15, 2019 12:14 am
The Times take on things:
(Yes, other media reports are available)
Labour vows billions to nationalise broadband in new election policy
Free internet would cost taxpayer £12bn-£25bn
A Labour government would nationalise Britain’s broadband network and offer free internet access to every household and business in the country, the party will say today.
Outlining the party’s most radical policy of the campaign to date, John McDonnell, the shadow chancellor, will say that Labour would commit £20.3 billion to speed up the introduction of broadband.
It would also nationalise BT’s Openreach, which owns the bulk of the full-fibre network. The cost of this commitment is unclear as its shareholders would be compensated at a price fixed by parliament, but Bloomberg has recently estimated Openreach’s value at between £12 billion and £25 billion.
The pledge is an echo of a promise by Michael Foot in Labour’s 1983 election manifesto to create a full-cable network in public hands.
Broadband is the fifth industry targeted for public ownership by Labour after nationalisation plans already announced for rail operators, Royal Mail, water and energy companies.
Labour’s broadband offer comes after a day in which:
• Nigel Farage was hit by a last-minute rebellion as Brexit Party candidates quit to give the Tories a better chance in the general election.
• Jeremy Corbyn refused to say whether migration would rise or fall if Labour won, amid a split among his senior team over free movement.
• The worst A&E waiting figures on record heightened Tory fears of a full-blown NHS winter emergency before next month’s vote.
Mr McDonnell told The Times that a new Labour government would make a priority of establishing the new state-owned entity, British Broadband.
The running costs, estimated at £230 million a year, would be funded from a new tax on multinational companies. They would be charged a percentage of their profits, according to a calculation of what proportion of the assets, staff and turnover was located in Britain, he said. Mr McDonnell added that Labour’s manifesto, which will be finalised this weekend, would not make significant changes to inheritance tax.
He said that poor access to the internet had emerged as critical factor holding back local economies and driving young people to leave communities. “I’ve been touring around small communities . . . to talk about how we develop their local economy,” he said. “In every one of those meetings local people have raised the issue about how they develop their economy and the failure to be connected in terms of full-fibre broadband and how it is holding them back.”
Universal free broadband could lift Britain’s productivity by £59 billion, spreading employment more evenly through the country, he said.
During the Tory leadership campaign Boris Johnson promised to accelerate a commitment to provide a full-fibre network nationwide from 2033 to 2025 by means of a £5 billion subsidy. Labour will instead promise to establish the network within a decade — and to provide the service free.
In 2017 Labour proposed tax rises of £49 billion. The shadow chancellor declined to say whether the total would be higher or lower in this year’s manifesto.
Q&A
Who owns Britain’s broadband network?
Most of the infrastructure is owned and operated by Openreach, part of BT Group. An increasing number of investors and service providers, such as Talktalk in Yorkshire, have been investing in building their own networks.
What is the state of the broadband network?
Full-fibre broadband is available in 2.5 million properties, or 8 per cent. That compares with 80 per cent in other parts of Europe.
What is Labour proposing?
Free full-fibre to all individuals and businesses by 2030. It plans to introduce the remaining 92 per cent of full-fibre through a government-owned network and to acquire access rights to the existing 8 per cent.
How would Labour deliver this?
By creating a new entity called British Broadband with two arms. British Digital Infrastructure would build the network, and British Broadband Service would deliver free broadband. It would mean carving out a big part of BT Group, and leaving businesses such as BT Sport, and EE, BT’s mobile phone network, in private ownership.
How would Labour pay for this?
Labour forecasts a one-off capital cost to build the network of £15.3 billion, in addition to the £5 billion of funding committed by the government. The cost of nationalising parts of BT would be set by parliament and paid for by swapping bonds for shares. It says maintenance costs would be low, at about £230 million a year.
What would this mean for other broadband providers and BT?
A national free broadband provider would be likely to wipe out other service providers whose main business is broadband, and leave others such as Virgin Media that offer various services to review their investment in Britain. It would also probably lead to lengthy legal action from the industry and potentially shareholders. Labour is considering allowing rival broadband providers to acquire access rights to the network, and to continue to offer services despite the state providing it for nothing.
I didn't defend the accusations about Corbyn because I agreed with what you said about him. I disagreed with what you said about Johnson so I told you so. Maybe the world would be a happier place if we all posted to say how much we agree with each other, but that's not the way it often works.
